The price of the cryptocurrency has increased by around 10% in less than 3 days. Its volatility increased to 14 on the day of the halving.
Data from CoinMarketCap indicate that the price of Bitcoin is currently overcoming resistance in the USD-9,500 range.
The chart of the price of Bitcoin since May 11th, the date on which the third halving of the Bitcoin network occurred, shows that it has had an upward trend since then. There has been an increase from USD 8,720, at the end of the 11th, to USD 9,645, at the time of writing this article. This indicates that in about 3 days the price of the first cryptocurrency has increased by 10.60%.
One of the indications of what is happening to the value of Bitcoin is its price volatility. It is important to remember that, its volatility was at 28.8% last March 29th. After that date, the metric started to decline slowly but steadily, which brought it to 11% on May 7th.
Since then until May 11th, the day of the halving, the price volatility of Bitcoin increased to 14.1%. At the time of writing this article, its volatility is 13%. This metric does not predict price changes, but only translates into figures the frequency or intensity with which the price will change.
Market analyst Marcel Pechman states that a drop in implied volatility means that traders were already anticipating a drop or recovery in the price after the halving. The recovery of the price of Bitcoin has shown in the short term that investor confidence is improving. It is possible to see this, considering that the market since May 9th was testing psychological support at USD 8,200, while the most notable resistance was at USD 9,000 until May 13th.
Investor Confidence Improves
After breaking this resistance, the price of the cryptocurrency has been testing new supports at USD 9,500. It seems that the market is flirting with resistance at USD 10,000, so Bitcoin could return, in the short term, to values such as those registered on May 8th.
According to a GlassNode chart, exchanges have had a significant reduction in net cash flow. Furthermore, the data provided by this company show that there are more active addresses that receive Bitcoin than addresses that send the cryptocurrency. The GlassNode team says that, although investors are withdrawing their cryptocurrencies from exchanges, this has not harmed the price of Bitcoin.
Last May 7th, the BTC unit reached USD 9,960 at the end of the day, while the price of the cryptocurrency is USD 9,645 at the time of writing this article. The movements of the price of Bitcoin can be considered as something natural in the continuous breathing of the market.
These movements could be related to the increase in investor confidence after the halving. However, it will be necessary to wait for a medium-length or long time to be able to appreciate the true implications that the halving will have on the price of the first cryptocurrency.
By Alexander Salazar